My "Bersonal" View

Saving for retirement is key for most business owners and professionals. Its need is now magnified – with all the comings and goings in Washington — with talk of reducing 401k contributions — with other threats to retirement benefits. The time is now to become more self-sufficient in planning for your retirement.

The new Tax Cut and Jobs Act gives sole proprietors and pass-through entity owners a special tax benefit, but one with a narrow window. For 8 years starting in 2018, most owners can deduct up to 20% of their business income. It’s an unprecedented gift to help fund retirement. Take your tax-free income and relay it into a tax-advantaged cash value life insurance policy. Grow your cash values tax-free and receive tax-free income in retirement.

The Fine Print

How much you have by way of savings, and how much you might contribute to a life insurance policy will vary from person to person. To participate in this approach, you need to have an established life insurance need. The amount of life insurance and the contribution will vary based on many factors, including your life insurance need. The
accumulation potential may vary based on the premium for the policy and the insured’s medical underwriting.

• To be effective, you need to hold the policy until death. A life insurance policy generally takes years to build up a substantial cash value.

• Tax-free distributions will reduce the face amount and cash value of a policy. You may need to fund higherpremiums in later years to keep the policy from lapsing.

• Generally, there are many additional charges associated with a life insurance policy, including but not limited to, a front end load, monthly administrative charge, cost of insurance charge, additional benefit rider costs and surrender charges. The amount that can be contributed will also vary from person to person. You’ll want to work with your tax advisor to determine how much is a reasonable annual contribution based on their business.

• This is only a limited window that expires after December 31, 2025. To take maximum advantage of this window, work with your financial professional to develop a design that optimizes this limited opportunity.

• $315,000 for married couples ($157,500 for single tax filers) is the key number. For many, your K-1 income will be below these amounts. Beyond these amounts there are a complex series of calculations. For most white-collar professionals, their ability to deduct 20% phases out over the next $100,000 of income over these key numbers.

• For other business owners, additional tests apply over these thresholds that are tied to the business’ wage income and a portion of the depreciable assets. Your tax advisor might be able to suggest other tax planning that can help you plan your income and business deductions to help bring your income in line with the $315,000/$157,500 thresholds. Your tax professional can tell you your approximate tax savings to help steer some of the tax savings towards your retirement savings.

We have all seen it. The big advertisement from Fisher Investments “I Hate Annuities and You Should Too!” – Ken Fisher is making a splash with this but as is typical with this kind of promo his “Special Report” is one-sided, very poorly researched and limited in scope. In addition, his “Annuity Conversion Program” is misleading in that his reps tell annuity clients that Fisher Investments will “pay for your annuity surrender charges” if you surrender your annuity and move it to Fisher Investments. I ran into this recently with several  clients of mine and looked into it. As I suspected it was not what it seemed.

Here is the claim from Fisher Investments:

“If you determine your annuity may not be the best option for your financial goals…we may compensate you for some or all of the annuity surrender fees incurred when liquidating your annuity.*”

Sounds pretty straight forward yes? But lets look at the fine print…or the * above:

* Annuity Surrender Fee Terms and Conditions

1. Limited Time Offer- The offer is available for a limited time only. Fisher Investments reserves the right to cancel, suspend or modify the offer at any time and for any reason without notice.

2. Eligibility- The offer is valid only to qualified investors who become Private Client Group clients of Fisher Investments and who surrender an annuity and transfer the proceeds to be managed by Fisher Investments. Nothing in the offer infers any right on any person to become a client of Fisher Investments. Fisher Investments reserves the right to refuse or terminate any person or client for any reason. Any request to participate in the offer is subject to acceptance by Fisher Investments.

3. Conditions-

a. The maximum surrender cost that Fisher may agree to pay will depend on the actual surrender cost of the annuity (excluding capital gains and other taxes) and the value of the portfolio transferred for management by Fisher Investments. Any portfolio already managed by Fisher Investments will be excluded for the purpose of determining the maximum surrender cost to be paid.

b. Any surrender cost that Fisher Investments may agree to pay will be payable in equal quarterly installments over several years. Installments are subject to adjustment based on withdrawal of assets from Fisher Investments management. All payments obligations will cease if the client relationship with Fisher Investments is terminated before the end of the payment period and no further installments will be paid..

4. Risks- There is no guarantee that any annuity proceeds managed by Fisher Investments will achieve any specified level of performance, or that performance will be any higher than what could be achieved within an annuity. Investing in securities involves the risk of loss. Past performance is no guarantee of future returns.

I have had several clients who have asked me about this program. I took a hard look at what the offer is. Fisher Investment will pay the surrender charges over time. But it is paid with a “reduction in fees” on a quarterly basis. In other words as they manage your portfolio they charge you fees. They will charge you less fees if you surrender the annuity and move it to them. Their fees for management are high to begin with so a reduction in fees merely brings them back to the rest of the Money Management world.

Also- if you look at the fine print, you must stay with Fisher to receive the reduction in fees. If you leave their obligation to pay for your surrender charges is lost. So let me get this straight…if you leave Fisher you lose your right to getting back the surrender charges…funny, to me that sounds like a surrender penalty for leaving Fisher Investments. Ironic isn’t it?

Ibbotson: Fixed Indexed Annuities Beat Bonds For Retirees

MARCH  2018 • 

A Turn-Key Program For All of our Associates

Imagine this scene…you are standing in a room filled with qualified prospects. Every one of them is there to hear you talk about a topic vitally important to their financial future. You are prepared, you know your subject, but more importantly you know the secret of how to connect with each person in the room and why each person will want to have a face-to-face meeting with you. The perfect world you say? At ISN Network this scene is taking place every week at different cities across the country.

ISN Network-contracted associates have been conducting proprietary seminars in cities across the country for the last several years. These seminar producers have many characteristics in common. First, they are committed to providing financial solutions to their clients and seminar attendees in an easy to understand format. They are NOT product pushers; instead they are problem solvers with a vast array of financial products that can help their clients. They are prepared, well-trained and focused. And most importantly they have learned the secret of success in seminar selling from the network of experts who work with ISN Network.

With the introduction of our new program “White Glove Seminars” ISN is taking our Seminar Systems to a new level. With the addition of White Glove we can now coordinate seminars in any library, community center or restaurant across the United States. The White Glove system utilizes an innovative, fully digital approach to seminars and removes all the risk to you. Yes. That is correct. This is the only turn-key, risk-free, hands-free, guaranteed way to grow your practice.

The seminar systems available from ISN Network and White Glove are varied and professional. We provide true mentorship throughout the process and can help you get started successfully in an arena with unlimited potential. Our programs incorporate all the best aspects of professional seminar planning and can be designed for your location and area of expertise. Our systems all include the best training, guarantees to fill the room; and what to say once the room is filled; how to turn prospects into face-to-face meetings; and how to create financial solutions from your clients goals and objectives. And most important- you do not pay any upfront costs – you only pay for the qualified prospects that show up to your meeting- that is our guarantee to you!

1-800-338-1892 x 215

At ISN Network the perfect world is just a phone call away. Take the first step in preparing upcoming marketing programs. Call Jeff Berson, President at ISN Network and find out how you can be a part of the “ISN Network Seminar Systems” program today!

If you have any questions, please do not hesitate to contact us at 1-800-338-1892 x 215

Most of you that follow my blog know that sometimes I can get personal with my remarks. As a father of two young boys who go to school every day I have always been aware and personally affected by the  litany of school shootings that rock our American culture. In the past I have tried to take action –  writing my congressman, participating in dialogues and even writing a song to help support the Sandy Hook Promise Foundation.

But today is a new day. After the Parkland shootings students from that school have been vocal and active in calling for Congress to take action. Just recently the State of Florida passed new regulations in regards to gun laws in their state. This was in direct defiance of the NRA and their agenda and was signed by a Governor who has always been opposed to such measures. This is progress.

Now there is something you can do. You can walk. Yes, the same students who called for action after the Parkland shootings have helped to spark a national movement of protest. Students across the country are walking out of school for 17 minutes to show Congress that the problems in the schools are real and need immediate action. It has already started.

You can show your support by walking at 10am too. For 17 minutes get up from your desk and walk outside. Say hi to your neighbors who are also walking. Stand in solidarity with your co-workers as we tell Congress that this problem needs to be solved. Our kids, our children’s lives depend on this. On action.

Take a walk.

We are going to make mistakes when dealing with and serving our clients. Who among us has not made a mistake? A mistake, especially with an important person like a client, requires an apology. In our world when we have to make an apology for an error that we made, we first try to come up with some solutions to the error so we have some positive ideas to deliver along with the bad news. We call this the “positive, negative, positive” approach. This works effectively when you are dealing with a reasonable client. But it is not always successful. I’m defining a successful apology as one that is received by the receiver as intended by the sender.

Read a great book on the plane last week. Martin Limbeck is a sales trainer and author of “No Is Short For Next Opportunity.” His ideas reminded me of what I learned from one of my mentors. The most powerful words a great salesmen has in his repertoire is “next.” Don’t let the “no’s” get you down. If you are doing the right thing the next opportunity is right around the corner.

Limbeck has some other great ideas to share. Here are three of his tips for sealing the deal:

1. Stand by what you sell: You have to believe in your product or company.
2. Set goals every day for future prospects: To succeed, be sure your sales funnel is never empty. Make it a habit, like brushing your teeth.
3. Prepare for anything: Write answers to every question or objection a potential client could dream up. Writing them down will help you commit them to memory.

Like most business owners, looking at the “numbers” is an important part of my daily activity. And the numbers can mean many different things. For us it could be the applications submitted, placed and pending. Or it could mean the commissions and overrides that come in each day. But in the end- it truly is all about the numbers.

Numbers may not be your best friend if you went into business for passion or creativity. Numbers need to become your best friend to stay in business for the long haul. Your business budget and accounting system should show you a full picture of what’s happening underneath the hood. It gives you insight to what aspects of your business are the most profitable and much more. Here’s why you need to review your financials regularly:

Stop Doing What’s Not Working

One of the top benefits of doing a business financial temperature check frequently is having the foresight to not waste time on areas that aren’t doing well. The end of the year is often the time where we circle back to recap the whole year before making changes.

The problem with this approach is that you could miss out on opportunities during the year. Check to see which jobs and clients are paying you the most money and think of ways to do more of those tasks. Consider putting an end to certain services that take up a lot of your time but don’t make a lot of money.

Keep Tabs on Your Cash Flow Before it Gets Ugly

You shouldn’t be waiting weeks or months to collect on invoices. One day you’ll wake up with a sad-looking bank balance and realize that you’re having a serious cash flow problem. Setting a weekly appointment to check your financials can give you the reminder you need to follow up on outstanding invoices. You can even hire a virtual assistant to help you send and collect on invoices so you can keep cash flowing properly.

Double Check Accuracy of Recurring Expenses

Business expenses these days are a lot like personal expenses. You sign up to put them on your card and the monthly transactions happen automatically.

When was the last time you reviewed your recurring bills to make sure they’re correct?

If you haven’t in a while, make sure your service agreements are matching up to what you’re currently paying. I caught a price discrepancy last week after comparing a recurring business charge with my plan. I was unaware I was being overcharged for about a month. Dig into the details because there may be money to save.

Look Beyond Revenue to Measure Your Success

You read a lot from business owners about revenue. We talked about expenses above, but I want to take home the fact that revenue is only part of the story. The full story should include a comparison of the expenses that are incurred to earn the money you do. Put plainly; your goal shouldn’t only be to increase your revenue. You may feel great about reaching your goal of earning $10,000 in one month, but if you spent $8,000 on ads and other operating expenses to earn it that variable needs to be considered closely.

Expenses can grow as your business grows so make sure that you’re bringing in enough profit to meet your own goals. Review the products and services that you invest in routinely. Ask yourself whether or not each of your business expenses are valuable. It’s true you may need to spend money to make money, but be smart with where you’re spending this money.

Final Word

Looking at your business finances with a critical eye doesn’t have to give you a heart attack each time. You can only hide from what’s going on financially for so long before it will impact your ability to perform and pay your bills.

Business accounting is more than just sending and receiving invoices. The overall picture needs your attention as well. Thankfully, once you start committing to regular financial check-ins it gets less scary.